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Affiliated Managers (AMG) is a Must-Add Now: Here's Why
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From recording 6-year (2010–2015) CAGR of 13.8% in assets under management to holding an almost unbeaten track record of buying equity interests in asset management companies with strong performance-oriented products, Affiliated Managers Group Inc. (AMG - Free Report) has been firing on all cylinders of late. The company’s diversified product mix along with the continued acquisition of equity stakes amid volatile markets is expected to yield positive results going ahead as well.
Though operating expenses have been on the rise owing to its investments in affiliates, Affiliated Managers’ increased focus on investments in alternatives and global strategies is expected to reap significant benefits.
With $642 billion in managed assets as of Mar 31, 2016, Affiliated Managers’ strengths include the upside in the top line, consistent earnings growth and steady capital position.
Reasons Why Affiliated Managers is a Must Buy
Revenue Growth: Affiliated Managers has witnessed revenue growth at a compounded annual growth rate (CAGR) of 12.5% (2010–2015). The company’s successful partnerships and global distribution capability along with diverse product mix will pave the way for future growth.
Earnings per Share Strength: Affiliated Managers’ earnings per share have recorded a CAGR of 31.4% over the last five years (2011–2015).
Earnings are expected to exhibit an upswing in the near term as the company’s projected EPS growth (F1/F0) is 7.04% compared to the industry average rate of negative 0.03%. To add to this, the company has recorded an average positive earnings surprise of 1.01% over the trailing four quarters.
Strong Leverage: Affiliated Managers’ debt/equity ratio stands at 0.33 compared to the S&P 500 average of 0.68, indicating relatively lower debt burden. It indicates the financial stability of the company even in adverse economic conditions.
Superior Return on Equity (ROE): Affiliated Managers’ ROE of 17.99%, as compared with the industry average of 11.36%, reflects the company’s commendable position over its peers.
Favorable Zacks Rank: Affiliated Managers currently carries a Zacks Rank #2 (Buy). The bullish rank is driven by upward earnings estimate revisions over the last 60 days. For 2016, the Zacks Consensus Estimate increased 2.5% to $13.43, while for 2017, it surged 3% to $15.15 per share.
The Bottom Line
Organic growth, initiatives undertaken to strengthen retail market operations, strong capital position and successful partnerships along with global distribution capabilities continue to support Affiliated Managers’ growth prospects. Also, a robust diversification strategy and growing assets under management serve as key strengths that support earnings stability.
Other Stocks to Consider
Some other investment management stocks worth considering are Artisan Partners Asset Management Inc. (APAM - Free Report) , AllianceBernstein Holding L.P. (AB - Free Report) and GAMCO Investors, Inc. . All the three companies carry a Zacks Rank #2.
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Affiliated Managers (AMG) is a Must-Add Now: Here's Why
From recording 6-year (2010–2015) CAGR of 13.8% in assets under management to holding an almost unbeaten track record of buying equity interests in asset management companies with strong performance-oriented products, Affiliated Managers Group Inc. (AMG - Free Report) has been firing on all cylinders of late. The company’s diversified product mix along with the continued acquisition of equity stakes amid volatile markets is expected to yield positive results going ahead as well.
Though operating expenses have been on the rise owing to its investments in affiliates, Affiliated Managers’ increased focus on investments in alternatives and global strategies is expected to reap significant benefits.
With $642 billion in managed assets as of Mar 31, 2016, Affiliated Managers’ strengths include the upside in the top line, consistent earnings growth and steady capital position.
Reasons Why Affiliated Managers is a Must Buy
Revenue Growth: Affiliated Managers has witnessed revenue growth at a compounded annual growth rate (CAGR) of 12.5% (2010–2015). The company’s successful partnerships and global distribution capability along with diverse product mix will pave the way for future growth.
Earnings per Share Strength: Affiliated Managers’ earnings per share have recorded a CAGR of 31.4% over the last five years (2011–2015).
Earnings are expected to exhibit an upswing in the near term as the company’s projected EPS growth (F1/F0) is 7.04% compared to the industry average rate of negative 0.03%. To add to this, the company has recorded an average positive earnings surprise of 1.01% over the trailing four quarters.
Strong Leverage: Affiliated Managers’ debt/equity ratio stands at 0.33 compared to the S&P 500 average of 0.68, indicating relatively lower debt burden. It indicates the financial stability of the company even in adverse economic conditions.
Superior Return on Equity (ROE): Affiliated Managers’ ROE of 17.99%, as compared with the industry average of 11.36%, reflects the company’s commendable position over its peers.
Favorable Zacks Rank: Affiliated Managers currently carries a Zacks Rank #2 (Buy). The bullish rank is driven by upward earnings estimate revisions over the last 60 days. For 2016, the Zacks Consensus Estimate increased 2.5% to $13.43, while for 2017, it surged 3% to $15.15 per share.
The Bottom Line
Organic growth, initiatives undertaken to strengthen retail market operations, strong capital position and successful partnerships along with global distribution capabilities continue to support Affiliated Managers’ growth prospects. Also, a robust diversification strategy and growing assets under management serve as key strengths that support earnings stability.
Other Stocks to Consider
Some other investment management stocks worth considering are Artisan Partners Asset Management Inc. (APAM - Free Report) , AllianceBernstein Holding L.P. (AB - Free Report) and GAMCO Investors, Inc. . All the three companies carry a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>